Brooklyn Journal of International Law
Volume 39 | Issue 1
Article 7
2014
The Unspecified Specificity of Sport: A Proposed
Solution to the European Court of Justice's
Treatment of the Specificity of Sport
Kevin Kehrli
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Kevin Kehrli, The Unspecified Specificity of Sport: A Proposed Solution to the European Court of Justice's Treatment of the Specificity of Sport,
39 Brook. J. Int'l L. (2014).
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THE UNSPECIFIED SPECIFICITY OF
SPORT: A PROPOSED SOLUTION TO
THE EUROPEAN COURT OF JUSTICE’S
TREATMENT OF THE SPECIFICITY OF
SPORT
E
uropean football is among the world leaders in revenue
generation. 1 Despite this perceived success, due to a
combination of inflated wages, large cash transfer fees, and
pressure from supporters to compete and succeed at the highest levels, football clubs often spend far more than the revenue
they bring in.2 In response to the financial frailty among football clubs across Europe, the Union des Associations Européennes de Football (“UEFA”) 3 promulgated a set of rules
called the UEFA Club Licensing and Financial Fair Play Regulations (“Financial Fair Play” or “FFP”).4
The purpose of these regulations is to, inter alia, “improve
the economic and financial capability of the clubs”5 and to “introduce more discipline and rationality in club football finances.”6
1. For example, the Barclay’s Premier League, England’s top division of
football, generated revenue of €2.5 billion in the 2010–2011 season. Annual
Review of Football Finance 2012, DELOITTE, http://www.deloitte.com/assets/
Dcom-UnitedKingdom/Local%20Assets/Documents/Industries/Sports
%20Business%20Group/uk-sbg-annual-football-finance-review-2012highlights.pdf (last visited Sept. 27, 2013).
2. See, e.g., Premier League Clubs Boast £3.1 Billion in Debt, GUARDIAN
(June 2, 2009), http://www.guardian.co.uk/football/2009/ jun/03/englishpremier-league-debt.
3. Unlike most sports organizations in the United States, the Union des
Associations Européennes de Football is not commonly referred to as “the
UEFA,” but rather called “UEFA.” See, e.g., About UEFA—Overview, UEFA,
http://www.uefa.com/uefa/aboutuefa/organisation/history/index.html
(last
updated May 25, 2013) [hereinafter About UEFA—Overview].
4. UEFA, UEFA CLUB LICENSING AND FINANCIAL FAIR PLAY REGULATIONS
(2012),
available
at
http://www.uefa.com/MultimediaFiles/Download/
Tech/uefaorg/General/01/80/54/10/1805410_DOWNLOAD.pdf
[hereinafter
UEFA CLUB LICENSING REGULATIONS].
5. Id. art. 2(2)(a).
6. Id. art. 2(2)(c).
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BROOK. J. INT’L L.
[Vol. 39:1
However, since UEFA approved the Financial Fair Play regulations in 2010, 7 there has been vast speculation as to their
compatibility with European Union law, including the right to
free movement and competition law. 8 This speculation stems
from uncertainty about the amount of power conferred upon
the European Court of Justice (“ECJ” or the “Court”) to evaluate sporting claims, and the Court’s consistent findings that
sporting rules or regulations are incompatible with EU law.9
EU law is based on various treaties developed over the course
of sixty years.10 The applicable treaty today is the Treaty on the
Functioning of the European Union (“Treaty” or “TFEU”). 11
While many provisions of the treaties have changed over the
EU’s long history, the provisions relating to sports governance
have remained substantively the same, with the exception of
their numbering.12
In the ECJ’s first ruling on sports governance, Walrave v. Association Union Internationale, 13 the Court declared that the
“practice of sport is subject to [EU] law only in so far as it constitutes an economic activity within the meaning of . . . the
Treaty.” 14 Since the decision, while European courts have
7. Financial
Fair
Play,
UEFA,
http://www.uefa.com/uefa/footballfirst/protectingthegame/financialfairplay
(last visited May 20, 2013).
8. See, e.g., Johan Lindholm, The Problem with Salary Caps under European Union Law: The Case Against Financial Fair Play, 12 TEX. REV. ENT. &
SPORTS L. 189 (2011).
9. Richard Parrish, Reconciling Conflicting Approaches to Sport in the
European Union, in PROFESSIONAL SPORT IN THE EU: REGULATION AND REREGULATION 21 (2000) [hereinafter Parrish, Reconciling Conflicting Approaches].
10. Timeline of the European Union, EUROPEAN INST. (Nov. 13, 2009),
http://www.europeaninstitute.org/EU-Facts/timeline-of-the-europeanunion.html.
11. Id.
12. Therefore, even though European Court of Justice (“ECJ”) decisions
refer to the article numbers in effect at the time of the decision, this Note will
refer to the applicable article numbers of the Treaty on the Functioning of the
European Union (“Treaty” or “TFEU”). For example, in Dona v. Mantero, decided in 1976, the ECJ discussed the free movement of workers provision as
Article 48. Case C-13/76, Dona v. Mantero, 1976 E.C.R. 1333, para. 39. Under
the TFEU, the free movement of workers provision is Article 45. This Note
will use Article 45 to refer to that provision.
13. Case 36/74, Walrave v. Ass’n Union Cycliste Internationale, 1974
E.C.R. 1405.
14. Id. para. 4.
2014]
SPECIFICITY OF SPORT
405
acknowledged the potential of a “‘sporting exception’ in which
rules of purely sporting interest were removed from the scope
of the Treaty,”15 they have struggled to separate pure sporting
rules from non-exempt areas of law such as competition, free
movement of workers, and other treaty provisions.16 As a result
of this struggle, the ECJ has often found that sporting rules are
incompatible with the Treaty based on the principle of proportionality, which “requires that action undertaken must be proportionate to its objectives,”17 even though it found that the objectives of the regulations were legitimate based on social or
public interests.18
Using a challenge to the Financial Fair Play regulations as a
paradigm of how the Court would analyze a challenge to sports
regulation, this Note argues that the ECJ’s strict use of the
principle of proportionality does not take into account the specificity of sport 19 that the ECJ itself established, resulting in
overregulation.20 Therefore, in order to account for the unique
nature of sports regulation, such as the preservation of equal
competition and interdependence among competitors, the ECJ
should first determine whether the regulations in question af-
15. RICHARD PARRISH & SAMULI MIETTINEN, THE SPORTING EXCEPTION IN
EUROPEAN UNION LAW 1 (2008).
16. See Dona, 1976 E.C.R. 1333, para. 12 (challenging rules under free
movement and nationality discrimination provisions).
17. TAKIS TRIDIMAS, THE GENERAL PRINCIPLES OF EU LAW 136 (2d ed. 2006).
18. See Case C-325/08, Olympique Lyonnais SASP v. Bernard, 2010 ECJ
EUR-Lex LEXIS 113 (Mar. 16, 2010) (encouragement, recruitment, and
training of young players can justify a restriction); Case C-415/93, Union
Royal Belge de Societes de Football Association ASBL v. Bosman (Bosman),
1995 E.C.R. I-4921 (maintaining a competitive balance and encouraging recruitment and training of young players can justify a restriction).
19. “For several years now, both politicians and legal scholars have discussed the much vexed question of the so-called ‘sporting exception’ to European Union law, sometimes referred to as the ‘specificity of sport.’” Gianni
Infantino, Meca-Medina: A Step Backwards for the European Sports Model
and
the
Specificity
of
Sport,
UEFA
(Feb.
10,
2006),
http://www.uefa.org/MultimediaFiles/Download/uefa/KeyTopics/480391_DOW
NLOAD.pdf.
20. While throughout the sporting cases presented to the ECJ, the Court
consistently found that the goals of the rules in question were legitimate, the
principle of proportionality left the Court with little choice but to find the
rules incompatible with the Treaty. See, e.g., Bosman, 1995 E.C.R. I-4921.
But see Case C-519/04, Meca-Medina v. Comm’n, 2006 E.C.R. I-6991.
406
BROOK. J. INT’L L.
[Vol. 39:1
fect a fundamental right 21 or a non-fundamental right. 22 Because fundamental rights warrant the use of strict proportionality, the ECJ’s analysis of these challenges should remain the
same. However, when non-fundamental rights are involved, the
Court should apply a less exacting, or “non-fundamental” proportionality test, which would lead to a finding that certain
practices comply with the Treaty even though those practices
would not meet the standard of proportionality currently applied by the ECJ.
Part I will discuss the basic structure of UEFA, the Financial
Fair Play regulations, and the development of EU sports law.
Part II will apply current EU sports law to Financial Fair Play
and show that a strict application of the principle of proportionality would lead to a finding that the regulations are incompatible with the Treaty. Part III will propose a new approach where the ECJ would first distinguish between fundamental and non-fundamental EU rights, and then apply a lower proportionality standard to non-fundamental rights in order
to grant sporting organizations the deference required for efficient internal regulation.
I. UEFA, FINANCIAL FAIR PLAY, AND THE DEVELOPMENT OF
EUROPEAN UNION SPORTS LAW
UEFA is “one of six continental confederations of world football’s governing body, [Fédération Internationale de Football
Association (“FIFA”)].” 23 As the continental confederation for
Europe, UEFA grants licenses to national football associations
and clubs24 and is currently comprised of fifty-three European
members. 25 In addition to “fostering and develop[ing] unity and
21. See discussion infra Part III.A.
22. Id.
23. About UEFA—Overview, supra note 3; see also The Organisation,
FIFA, http://www.fifa.com/aboutfifa/organisation/index.html (last visited
Sept. 29, 2013).
24. An example of a national football association is England’s aptly named
“Football Association” or “The FA.” The FA’s duties include “promoting the
development of [football], . . . regulating the game on and off the field, . . .
sanctioning all matches, leagues and competitions played in England, . . .
[and] organizing . . . national competitions.” About the Football Association—
The FA Strategic Plan 2011–2015, THE FA, http://www.thefa.com/aboutfootball-association/strategy (last visited May 20, 2013).
25. About UEFA—Overview, supra note 3; UEFA CLUB LICENSING
REGULATIONS, supra note 4, art. 5.
2014]
SPECIFICITY OF SPORT
407
solidarity among the European football community,” 26 UEFA
hosts the most prestigious and lucrative club tournaments in
world football.27 Only licensed clubs from member associations
can participate in these tournaments, and because compliance
with UEFA regulations is required to obtain a license, the financial incentive to comply is too high for most clubs to risk
non-compliance.28
UEFA enacted its Financial Fair Play regulations in response
to “repeated, and worsening, financial loses” among football
clubs.29 The federation’s fears were not unfounded; between the
approval of FFP in 2010 and its implementation in 2012,30 as
many as ten clubs declared bankruptcy due to overspending.31
One example is the Scottish club Glasgow Rangers,32 who were
26. About UEFA—Overview, supra note 3.
27. In European football, the terms tournament, league, and cup are often
used interchangeably. These tournaments include the Champions League,
Europa League, and Super Cup. The most lucrative of the tournaments is the
Champions League, which distributed €904.6 to clubs that competed in the
2012–2013 tournament. Management Clubs Benefit from Champions League
CHAMPIONS
LEAGUE
(July
23,
2013),
Revenue,
UEFA
http://www.uefa.org/management/finance/news/newsid=1975196.html [hereinafter Champions League Revenue].
28. “Facing the prospect of being punished with heavy fines and barred
from European competition, [football clubs] are desperate to make sure that
generated revenues are equal or greater than expenditure[s].” Fair Play?
Football Clubs Seek to Beat Financial Offside Trap, CNN,
http://edition.cnn.com/2012/08/23/sport/football/football-financial-fair-playtrabzonspor/index.html (last visited May 20, 2013).
29. Financial Fair Play, supra note 7.
30. See Servette Geneva File for Bankruptcy, FOURFOURTWO.COM (Mar. 1,
2012, 6:10 PM), http://fourfourtwo.com/news/restofeurope/96534/default.aspx;
Portsmouth in Administration as Championship Club Face Another Fight for
MAIL
(Feb.
17,
2012,
3:20
PM),
Survival,
DAILY
http://www.dailymail.co.uk/sport/football/article-2102526/Portsmouthadministration.html.
31. Such overspending is the result of large transfer fees, which are lump
sum payments to other clubs to acquire a player and very high salaries of
players and managers. The Football Debt League—Top 10 Most Indebted
Clubs, SOCCERLENS.COM, http://soccerlens.com/the-football-debt-league-top10-most-indebted-clubs/50035/ (last visited May 20, 2013).
32. Unlike American sports, football clubs are often referred to by city and
team name without the article “the.” For example, the American baseball
team is called “the Texas Rangers” or “the Rangers,” whereas the Scottish
football club is just called “Glasgow Rangers” or “Rangers.” See, e.g., Rangers
Dropped to Lowest League in Scotland, USA TODAY (July 14, 2012, 12:03
AM),
http://www.usatoday.com/sports/soccer/story/2012-07-13/glasgow-
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[Vol. 39:1
frequent champions of Scottish football.33 The club, founded in
1873,34 recently declared bankruptcy; and after a vote among
other teams in the Scottish Premier League, the club was
forced to begin the 2012–2013 season in the lowest competitive
tier of professional football in Scotland.35 Although an extreme
example of a club’s financial collapse, Glasgow Rangers’ bankruptcy demonstrates that even the world’s most popular clubs
are not immune to the perils of overspending.36
A. Financial Fair Play Regulations
Seeking to prevent further instances of insolvency, UEFA’s
Financial Fair Play regulations require that clubs “‘live within
their means’ or break even based on football-related income at
least matching their football-related expenditure[s].” 37 Additionally, there are several non-financial requirements listed in
the FFP Regulations.38 For example, a club must show that it
has “a youth development program, player registration, training facilities, a general manager, a financial officer, a media
rangers-dropped-to-lowest-league-in-scotland/56212348/1 [hereinafter Rangers Dropped].
33. Rangers have won fifty-four league championships, the most of any
team in the Scottish Premier League. Id.
34. History—Founding
Fathers,
RANGERS,
http://www.rangers.co.uk/club/history/club-history/item/499-founding-fathers
(last visited May 20, 2013).
35. Rangers Dropped, supra note 32.
36. See, e.g., Shocking DEBTS and Financial Trouble: Rangers, Liverpool,
Spurs, Leeds and More Big Clubs in Dire Straits, TALKSPORT (Feb. 15, 2012),
http://www.talksport.co.uk/magazine/features/2012-02-15/shocking-debtsand-financial-trouble-rangers-liverpool-spurs-leeds-and-more-big-clubs-direstraits. Rangers’ insolvency also demonstrates the ripple effect that can occur
when a club goes bankrupt. Not only are the club’s players, supporters, creditors, and sponsors affected, but the future of the Scottish Premier League as
a whole could be in jeopardy due to the league’s reliance on the revenue and
spectacle its top rivalry creates. See Rangers Football Club Enters Administration, BBC NEWS (Feb. 14, 2012, 2:54 PM), http://www.bbc.co.uk/news/ukscotland-glasgow-west-17026172; Dissolving Scotland’s Old Firm, N.Y. TIMES
(Aug. 8, 2012), http://www.nytimes.com/2012/08/09/sports/soccer/in-scottishsoccer-the-rangers-celtic-rivalry-is-rattled-to-its-core.html.
37. Platini Wins EC Backing for Financial Fair Play Regulations,
GUARDIAN (Mar. 22, 2012), http://www.independent.co.uk/sport/football/newsand-comment/platini-wins-ec-backing-for-financial-fair-play-regulations7580682.html.
38. See UEFA CLUB LICENSING REGULATIONS, supra note 4, arts. 17–18, 20,
25, 28–40.
2014]
SPECIFICITY OF SPORT
409
officer, [and] a supporter liaison officer . . . .”39 If a club does not
comply with the FFP regulations, UEFA or the club’s national
association can revoke, or refuse to renew, the club’s license.40
For most of the larger, more established clubs, compliance
with the non-financial regulations requires very little change to
club policies, as it is likely that most of these processes and positions are either already in place, or would require only minor
adjustments.41 Therefore, “[t]he [real] challenge for the clubs is
to fulfill the break-even requirement,”42 even though the regulations account for deviations in clubs’ profits and expenses,
allowing up to €5 million in losses each year.43 Additionally, the
regulations allow for excess losses up to €45 million for the
2013 and 2014 seasons, €30 million for the 2015 through 2018
seasons, and “a lower amount as decided by . . . the UEFA Executive Committee” 44 in the subsequent years, so long as “the
excess [losses are] entirely covered from equity participants
and/or related parties.”45 This allows clubs with wealthy investors to continue to compete in UEFA competitions notwithstanding large losses until 2018,46 as long as the investors are
willing to contribute equity to cover any excess losses beyond
the permissible deviation of €5 million. 47 However, if a club
does not have the assistance of a wealthy benefactor, or other
means of quickly generating income, the maximum allowable
football loss without suspension of the club’s UEFA license is
€5 million.48 With such staggering sums of money involved, the
owners, or even players, of a club whose license is revoked are
likely to challenge the FFP regulations’ compatibility with EU
free movement or competition law. Regardless of the compelling reasons for Financial Fair Play’s implementation, the ECJ
39. Ryan Murphy, Playing Fair in the Board Room: An Examination of the
Corporate Structures of European Football Clubs, 19 MICH. ST. J. INT’L L. 409,
414 (2011) (citing UEFA CLUB LICENSING REGULATIONS, supra note 4, arts.
17–18, 20, 25, 28–40, 35, 36–39).
40. UEFA CLUB LICENSING REGULATIONS, supra note 4, art. 14.
41. Murphy, supra note 39, at 414.
42. Id.
43. UEFA CLUB LICENSING REGULATIONS, supra note 4, art. 61.
44. Id.
45. Id.
46. After 2018, the maximum deviation allowed will be decided by the
UEFA Executive Committee. Id.
47. Id.
48. Id.
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[Vol. 39:1
would likely find that the regulations are incompatible with the
Treaty because the FFP regulations do not meet the strict
standards of the proportionality test developed in EU case law.
B. The Development of EU Sports Law: From an Exception to a
Justification
Over the course of nearly thirty years, the ECJ has recognized that sports are of a unique nature and therefore may
warrant different treatment than other areas of the law. At
first, the ECJ considered rules of a purely sporting interest to
be outside the scope of the treaty, or an exception to the rules.49
However, as more cases arose, this exception turned into a justification for restrictions on competition or the free movement
of workers, subject to the principle of proportionality. 50 This
section will introduce the relevant Treaty provisions and the
principle of proportionality, outline the development of sports
law and its application through a discussion of the landmark
case law, then conclude with recent developments in the EU
legislature’s specific mention of sport.
1. The Relevant Treaty Provisions and the Principle of Proportionality
In order to better understand the development of EU sporting
case law, a brief introduction of the relevant Treaty provisions
is warranted.51 Challenges to sports regulations have generally
been brought under three Treaty provisions. First, many early
challengers invoked Article 12, which prohibits “any discrimination on grounds of nationality.”52 However, recently this type
of challenge has given way to free movement challenges under
Article 45, which dictates “that free movement for workers
49. See Case 36/74, Walrave v. Ass’n Union Cycliste Internationale, 1974
E.C.R. 1405, para. 4.
50. See generally Simon Gardiner & Roger Welch, Bosman—There and
Back Again: The Legitimacy of Playing Quotas under European Union Sports
Policy, 17 EUR. L. J. 828, 828 (2011); PARRISH & MIETTINEN, supra note 15, at
87.
51. See discussion infra Part II.A.
52. See, e.g., Case C-13/76, Dona v. Mantero, 1976 E.C.R. 1333; Walrave,
1974 E.C.R. 1405.
2014]
SPECIFICITY OF SPORT
411
shall be secured within the Union.”53 Finally, these challenges
are often paired with Article 101 challenges, which prohibit “all
agreements between undertakings, decisions by associations of
undertakings and concerted practices which may affect trade
between Member States.”54
To analyze these claims, the ECJ applies the principle of proportionality, a general principle of EU law55 that “requires that
action undertaken must be proportionate to its objectives.” 56
The principle stems from the legal systems of various member
states and “[i]ts development as a ground for review can be
seen as the judiciary’s response to the growth of administrative
powers and the augmentation of administrative discretion.”57
The test for proportionality can be broken down into two requirements.58 The first is whether the measure aims to achieve
a legitimate objective.59 There are many types of legitimate objectives, but these vary from case to case and often involve
matters of public interest or public safety. 60 The second requirement is whether the measure is necessary and not overly
restrictive. 61 To determine necessity, the ECJ often asks
“whether there are other less restrictive means of producing
the same result.”62 This second requirement, often called the
least restrictive means test, is what frequently leads to a finding that a regulation is incompatible with the Treaty.
53. See, e.g., Case C-325/08, Olympique Lyonnais SASP v. Bernard, 2010
ECJ EUR-Lex LEXIS 113 (Mar. 16, 2010); Case C-415/93, Bosman, 1995
E.C.R. I-4921; Dona, 1976 E.C.R. 1333; Walrave, 1974 E.C.R. 1405.
54. See, e.g., Bosman, 1995 E.C.R. I-4921; Walrave, 1974 E.C.R. 1405.
55. TRIDIMAS, supra note 17, at 6.
56. Id. at 136.
57. Id.
58. Tridimas describes it as a three-part test, but states that “in practice,
the [ECJ] does not distinguish in its analysis between the second and third
test.” Id. at 139.
59. Id.; see also Case C-325/08, Olympique Lyonnais SASP v. Bernard,
2010 ECJ EUR-Lex LEXIS 113 (Mar. 16, 2010); Bosman, 1995 E.C.R. I-4921;
Case C-13/76, Dona v. Mantero, 1976 E.C.R. 1333; Walrave, 1974 E.C.R.
1405.
60. TRIDIMAS, supra note 17, at 136.
61. Id. at 139.
62. Id.
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2. The Development of EU Sporting Case Law
In the 1974 case, Walrave v. Association Union Cycliste Internationale, the Court ruled on a sport governance matter that
paved the way for the confusion still present in EU sports law
today.63 In the case, two cyclists challenged a rule promulgated
by the Association Union Cycliste Internationale (“UCI” or “Cyclist Union”) that required the pacemaker to be of the same nationality as the cyclist.64 The cyclists argued that this practice
constituted discrimination on grounds of nationality under Article 12 of the Treaty and a restriction of free movement under
Article 45.65 The Court first stated that “the practice of sport is
subject to [European] Community law in so far as it constitutes
an economic activity,”66 then concluded that the “composition of
. . . national teams . . . has nothing to do with economic activity.”67 Therefore, the Court found the rules in question did not
fall within the scope of the discrimination and free movement
provisions of the Treaty. 68 The Court’s interpretation in
Walrave created the idea that “pure sporting rules” were removed from the scope of the Treaty, providing sporting organizations with a potential defense to challenges under EU law
and laying the framework for much of the following thirty-five
years of EU sporting case law.
Two years later, in Dona v. Mantero,69 the Italian Football
Federation (“IFF”) attempted to use this exception to validate a
set of rules that indirectly70 resulted in only Italian footballers
being able to participate in professional or non-professional
63. Walrave, 1974 E.C.R. 1405.
64. Walrave, 1974 E.C.R. 1405, para. 2. The rule in question stated in
French “l’entraîneur doit etre de la nationalite de coureur,” which translates
literally to “the coach must be of the nationality of rider.” Id. The ECJ clarifies the phrase idiomatically finding in English it means “[t]he pacemaker
must be of the same nationality as the stayer.” Id.
65. The applicant also included a free movement of services claim, but the
ECJ analyzed both claims together. Id.
66. Id. para. 4.
67. Id. para. 8.
68. Id. para. 13.
69. Case C-13/76, Dona v. Mantero, 1976 E.C.R. 1333.
70. The rule said that only players who were affiliated with the Italian
Football Federation could take part in matches, but affiliation to the federation was only available to Italian nationals. Therefore, only Italian nationals
could take part in matches. Dona, 1976 E.C.R. 1333, para. 5.
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SPECIFICITY OF SPORT
413
matches.71 The Court again spoke of “the possibility that certain specific rules could constitute ‘purely sporting’ rules that
were not contrary to the Treaty freedoms and their requirement of non-discrimination,”72 but without much explanation,
found that the IFF’s rules were incompatible with the Treaty.73
Because the Court failed to elaborate on what type of rules
could constitute purely sporting rules other than the national
team selection rules in Walrave, sporting organizations were
left with little guidance on how to regulate.74
Nearly thirty years after Walrave, in Union Royal Belge de
Societes de Football Association ASBL v. Bosman,75 the Court
drastically narrowed the “pure sporting rules” exception, but
opened the door to another possible defense for sporting organizations. 76 Jean-Marc Bosman was a Belgian football player
whose contract had expired with RFC Liege, a football club in
Belgium’s highest division.77 Several other clubs were interested in signing Bosman, but transfer negotiations between RFC
Liege and the interested clubs were unsuccessful because RFC
Liege demanded too high of a price.78 Subsequently, RFC Liege
refused to let Bosman leave the club and reduced his wages,79
prompting Bosman to challenge RFC Liege’s transfer practices,
71. Id.
72. PARRISH & MIETTINEN, supra note 15, at 84.
73. Dona, 1976 E.C.R. 1333, para. 2.
74. Klause Vieweg, The Legal Autonomy of Sport Organizations and the
Restrictions of European Law, in PROFESSIONAL SPORT IN THE EU:
REGULATION AND RE-REGULATION 84, 104 (Simon Gardiner, Richard Parrish, &
Robert C.R. Siekman eds., 2009).
75. Case C-415/93, Bosman, 1995 E.C.R. I-4921.
76. PARRISH & MIETTINEN, supra note 15, at 84.
77. Bosman, 1995 E.C.R. I-4921, para. 28. European football leagues are
set up in different divisions, or tiers, with a promotion and relegation system
whereby at the end of the season, the clubs that finish in the worst ranking of
one division are “relegated” to the division immediately below. See discussion
infra Part II.B.
78. Bosman, 1995 E.C.R. I-4921, paras. 28–34.
79. Id. para. 29.
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as well as “the so called 3+2 rule,”80 which limited the number
of foreign players that each club could have on its roster.81
Bosman challenged the rules as being incompatible with Article 12, prohibiting discrimination based on nationality; Article 45, prohibiting restrictions on the free movement of workers; and Article 101, prohibiting competition distortion. The
Court did not address Bosman’s challenges under Article 101,
“perhaps recognizing the difficulties involved with the application of competition law to sporting competitions.” 82 However,
the Court did address the challenge under Article 45,83 which
“entail[s] the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment.”84
The Court again turned to the language of Walrave and Dona
limiting the scope of the TFEU to sporting regulations that
constitute economic activities, as defined in the Treaty.85 More
significantly, the Court added to the rule, stating that “within
the context of economic sporting activity, [it] recognized a category of rules or practices ‘justified on non-economic grounds
related to the particular nature and context of certain matches’
and limited to their proper objectives.”86 This language represented the Court’s recognition that its definition of pure sporting rules, as formulated in Walrave and Dona, was too narrow
due to the complex relationship between sport and its economic
aspects.87
Turning to the merits of Bosman’s challenge, the Court ruled
that RFC Liege’s transfer policy was incompatible with Article
45 as it was “likely to restrict the freedom of movement of players who wish to pursue their activity in another member
80. PARRISH & MIETTINEN, supra note 15, at 86. “Under the 3+2 rule, teams
could only have a maximum of three foreign players in a team plus a maximum of two foreign players who were classified as assimilated players in that
they had been registered in the relevant national association for at least five
years.” Gardiner & Welch, supra note 50, at 829 n.3.
81. Gardiner & Welch, supra note 50, at 829 n.3.
82. PARRISH & MIETTINEN, supra note 15, at 86.
83. Consolidated Version of the Treaty on the Functioning of the European
Union, art. 45, Mar. 30, 2010, 2010 O.J. (C 83) 120 [hereinafter TFEU].
84. Id.
85. PARRISH & MIETTINEN, supra note 15, at 86.
86. Id.
87. Id. at 87.
2014]
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state.”88 However, such restrictions may still be justified under
the principle of proportionality, and therefore compatible with
the Treaty, if the “rules pursued a legitimate aim compatible
with the Treaty and were justified by pressing reasons of public
interest.”89 Applying this standard, the Court found that “the
aims of maintaining a balance between clubs by preserving a
certain degree of equality and uncertainty as to results and of
encouraging the recruitment and training of young players
must be accepted as legitimate,” meeting the first prong of the
proportionality test. 90 Next, however, the Court found that
while the transfer rules in question have such an effect,91 the
“same aims [could] be achieved at least as efficiently by other
means.”92 Thus, by not meeting the least restrictive means test,
the rules did not satisfy the second prong of the proportionality
test and were therefore incompatible with the Treaty.93
Similarly, the Court found that the 3+2 rule also placed an
impermissible restriction on the free movement of workers.94
The Court first distinguished the rule from the “purely sporting” national team rules in Walrave and Dona and found that
the rule “has the effect of reducing the workers’ chances of finding employment.”95 As a justification for the rule, the national
associations 96 argued, inter alia, 97 that the rules “help[ed] to
maintain a competitive balance between clubs by preventing
the richest clubs from appropriating the services of the best
players.”98 The Court conceded that maintaining a competitive
balance could be a legitimate justification, but found that the
3+2 rule was “not sufficient to achieve [that] aim” because a
single club could still acquire the best domestic players and
88. Case C-415/93, Bosman, 1995 E.C.R. I-4921, para. 99.
89. Id. para. 104.
90. Id. para. 106.
91. Id. para. 108.
92. Id. para. 110.
93. Id. para. 114.
94. Id. para. 121.
95. Id. para. 124.
96. The Belgian National Football Association, UEFA, and German,
French, and Italian governments argued in favor of the rules. Id. para. 122.
97. They also argued that the rule “serve[d] to maintain the traditional
link between each club and its country” and that it was “necessary to create a
sufficient pool of national players to provide the national teams with top
players to field in all team positions.” Id. paras. 123–24.
98. Id. para. 125.
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thus undermine the competitive balance. Therefore, the rule
was not proportional to its objectives.99
The Bosman ruling had a significant impact on the internal
structure of sports organizations100 and sparked concerns that
the Court was interfering with “a whole raft of sectors never
intended to be subject to supranational governance.” 101 Further, the analysis showed that sporting interests, such as
maintaining a competitive balance and recruiting and training
youth players, could justify a restriction for the purposes of
proportionality.102 However, by finding that these measures did
not meet the least restrictive means test without further explanation, the Court again left sports regulators with very little
guidance as to how they should regulate to achieve their goals.
Five years after Bosman, in 2000, the ECJ made two rulings
within two days of each other that had a significant impact on
EU sports law.103 In the first case, Deliege v. Ligue de Judo,104
the Court broadened its reach into sports governance and further narrowed the Walrave exception by “offer[ing] an expansive interpretation of ‘economic activity.’”105 Deliege involved an
amateur Judo 106 athlete who claimed that a set of European
Judo Union rules, which restricted the number of participants
in Judo tournaments on the basis of nationality, were incompatible with EU law.107 In finding amateur sport “constitutes
an economic activity within the meaning of . . . the [Treaty],”108
the Court offered a broad and complicated interpretation of
amateurism and its connection with economic activity within
EU law.109 It essentially said that there are means outside of
remuneration that bring amateur athletics within the scope of
economic activity, such as sponsorships, celebrity status, and
99. Id. para. 135.
100. Parrish, Reconciling Conflicting Approaches, supra note 9, at 29.
101. Id.
102. Bosman, 1995 E.C.R. I-4921, para. 106.
103. PARRISH & MIETTINEN, supra note 15, at 89.
104. Joined Cases C-51/96 & C-191/97, Deliege v. Ligue de Judo (Deliege),
2000 E.C.R. I-2549, para. 10.
105. PARRISH & MIETTINEN, supra note 15, at 89.
106. Judo is a “sport developed from jujitsu [that] emphasizes the use of
quick movement and leverage to throw an opponent.” MERRIAM-WEBSTER’S
COLLEGIATE DICTIONARY 677 (11th ed. 2003).
107. Deliege, 2000 E.C.R. I-2549, para. 10.
108. Id. para. 13.
109. Id.
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SPECIFICITY OF SPORT
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other grants or aid.110 However, without providing further explanation, “the Court left rather unclear how directly connected
the economic activity must be for the sporting rule to be capable of constituting a restriction on the freedom to provide services.”111 On the other hand, the Court did make clear “that the
decisions of national amateur associations could be subject to
[EU] law even where the sport itself had no direct economic
dimension and the rule in question was non-discriminatory.”112
The second case, Lehtonen v. Fédération Royale Belge des Sociétés de Basket-ball (Belgian Royal Federation of Basketball
Clubs - FRBSB),113 involved the player transfer policies of the
International Basketball Federation (“FIBA”).114 Although the
transfer rules applied uniformly to all member federations, the
Court still found “[t]he existence of an obstacle to freedom of
movement.” 115 Therefore, it had to determine whether “the
need to prevent distortion of sporting competitions was capable
of justifying those rules.”116 Though the Court found that the
measures met the first prong of the proportionality test because the rules of “setting . . . deadlines for the transfers of
players may meet the objective of ensuring the regularity of
sporting competitions,”117 it concluded that the rules went “beyond what [was] necessary for achieving the aim pursued.”118
Therefore, the second prong of the proportionality test was not
met.119 Again, the Court failed to elaborate on what would be a
proportional rule, offering no guidance to sporting organizations as to what would constitute a rule that is proportional to
its objectives.120
110. Id.
111. PARRISH & MIETTINEN, supra note 15, at 91.
112. Id.
113. Case C-176/96, Lehtonen v. Fédération Royale Belge des Sociétés de
Basket-ball [Belgian Royal Federation of Basketball Clubs—FRBSB] (Lehtonen), 2000 E.C.R. I-2681.
114. “Basketball is organized at world level by the [International Basketball
Federation (‘FIBA’)].” Id. para. 3. Like the structure of UEFA, FIBA is comprised of individual national federations. For example, Lehtonen involved the
FRBSB, the Royal Belgian Basketball Federation. Id.
115. Id. para. 51.
116. PARRISH & MIETTINEN, supra note 15, at 92.
117. Lehtonen, 2000 E.C.R. I-2681, para. 53.
118. Id. para. 58.
119. Id.
120. PARRISH & MIETTINEN, supra note 15, at 93.
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BROOK. J. INT’L L.
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By the time the Court reached its decision in Meca-Medina v.
Commission121 in 2006, EU sports law, while still imperfect and
disconnected, was “underpinned by identifiable themes which
define[d] the permitted scope of sports governance.”122 One of
these themes, the “purely sporting” exception from the scope of
the Treaty declared in Walrave, was essentially struck down by
the Court’s decision in Meca-Medina.123 Meca-Medina involved
a challenge under Articles 45 and 101 by two professional
swimmers who were banned from competition for two years after failing a drug test administered by Federation Internationale de Natation (“FINA”),124 the international governing body
of professional swimming.125 The Court of First Instance126 interpreted “th[e] anti-doping rules [as] concern[ing] exclusively
non-economic aspects of sport, designed to preserve ‘noble competition.’”127 The ECJ rejected this notion and interpreted precedent on rules of pure sporting interests very narrowly.128 The
Court held that if an activity falls under a provision of the
Treaty, “that activity must satisfy the requirements of those
provisions,”129 thereby rejecting “the notion that a ‘purely sporting’ rule is of itself apt to escape the scope of application of the
Treaty.”130
Turning to the merits of the case, the Court found that “safeguard[ing] equal chances for athletes [to compete on level
terms, without performance enhancing drugs], athletes’ health,
the integrity and objectivity of competitive sport and ethical
values in sport” were sufficient justifications to meet the first
121. Case C-519/04, Meca-Medina v. Comm’n, 2006 E.C.R. I-6991.
122. Stephen Weatherill, The Influence of EU Law on Sport Governance, in
SPORT, LAW, AND POLICY: REGULATION, RE-REGULATION AND REPRESENTATION
79, 80 (Simon Gardiner, Richard Parrish & Robert C.R. Siekman eds., 2009)
[hereinafter Weatherill, The Influence of EU Law].
123. PARRISH & MIETTINEN, supra note 15, at 96.
124. Weatherill, The Influence of EU Law, supra note 122, at 81.
INTERNATIONALE
DE
NATATION,
125. See
generally
FEDERATION
http://www.fina.org/H2O/ (last visited May 20, 2013).
126. The Court of First Instance was created in 1989 to alleviate the increasing caseload of the European Court of Justice. EU Factsheets: Court of
Justice
of
the
European
Union,
CIVITAS,
http://www.civitas.org.uk/eufacts/FSINST/IN5.php (last visited Sept. 30,
2013).
127. Weatherill, The Influence of EU Law, supra note 122, at 81.
128. Case C-519/04, Meca-Medina v. Comm’n, 2006 E.C.R. I-6991, para. 26.
129. Id. para. 28.
130. Weatherill, The Influence of EU Law, supra note 122, at 83.
2014]
SPECIFICITY OF SPORT
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prong of proportionality.131 Next, the Court gave deference to
FINA’s thresholds for punishment, and in a rare decision,
found that the rules were not excessive or disproportional.132
However, it is worth noting that the Court did not apply the
stringent, least restrictive means test used in prior decisions.133
It is also important to note that this relaxed standard may indicate that when a case involves something that the Court does
not approve of, such as using performance-enhancing drugs, it
is less willing to offer the same fundamental protection. Further, Meca-Medina marked the end of the existence of a pure
sporting exception, leaving only a sporting justification for the
purposes of the proportionality test.134
This approach was confirmed in Olympique Lyonaisse SASP
v. Bernard,135 where the purely sporting exception was not even
argued.136 Bernard involved another Article 45 challenge to a
transfer rule, which Olympique Lyonaisse (“Lyon”), a French
football club, claimed resulted in a restriction on the free
movement of workers.137 Bernard, a player whose trainee contract138 with Lyon had expired, refused to sign a new contract
with the club. Instead, he signed a professional contract with
Newcastle United FC, an English club. 139 Lyon then sought
compensation based on a French rule that said if a professional
club trained a player between the ages of sixteen and twentytwo under a fixed term contract, that player must sign a professional contract with that club upon the expiration of the
trainee contract or the club is entitled to damages.140 The ECJ
found that such rules “are likely to discourage [a] player from
131. Meca-Medina, 2006 E.C.R. I-6991, para. 43.
132. See id. para. 54.
133. The Court stated that since the “appellants [did] not specify at what
level the thresholds should have been set[,] . . . it does not appear that the
restrictions go beyond what is necessary.” Id. para. 53.
134. PARRISH & MIETTINEN, supra note 15, at 87.
135. Case C-325/08, Olympique Lyonnais SASP v. Bernard, 2010 ECJ EURLex LEXIS 113 (Mar. 16, 2010).
136. Id.
137. Id. para. 17.
138. Players between the ages of sixteen and twenty-two are considered
trainees and sign professional contracts once their trainee contracts expire.
Id. para. 3.
139. Id. paras. 7–10.
140. Id. para. 47.
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exercising his right of free movement”141 and therefore constituted a restriction incompatible with the Treaty.142
The Court then applied the proportionality test. The Court
reiterated that the special nature of sport gives rise to justifiable reasons of public interest,143 but found that the rules did
not meet the second prong of the proportionality test. 144 The
Court reasoned that because the rules were based on damages,
rather than actual compensation for training, they were “not
necessary to ensure the attainment of [the] objective” of promoting the recruitment and training of young players, again
showing the difficulties of meeting the second prong of the
Court’s strict proportionality standard.145
Thus, having affirmed the elimination of a pure sporting exception from Meca-Medina, the Bernard Court left only a sporting justification for sporting rules that may implicate a provision of the Treaty.146 Further, this standard applies to governance of both professional and amateur sports, due to the various ways in which both fall within the Treaty’s definition of
economic activity.147 Finally, for such a rule or regulation to be
justifiable, it must meet the strict proportionality standards set
forth in both Bosman and Lehtonen.148
C. The White Paper on Sport and the Treaty of Lisbon
In 2007, the Commission of the European Communities
(“Commission”) released the White Paper on Sport 149 (“White
Paper”) in order “to give strategic orientation on the role of
sport in Europe, to encourage debate on specific problems, to
enhance the visibility of sport in EU policy-making, and to
raise public awareness of the needs and specificities of the sec141. Id. para. 35.
142. Id. para. 37.
143. Id. para. 39.
144. Id. para. 48.
145. Id. para. 50.
146. See Case C-519/04, Meca-Medina v. Comm’n, 2006 E.C.R. I-6991;
PARRISH & MIETTINEN, supra note 15, at 87; Case C-325/08, Olympique Lyonnais SASP v. Bernard, 2010 ECJ EUR-Lex LEXIS 113 (Mar. 16, 2010).
147. See Joined Cases C-51/96 & C-191/97, Deliege, 2000 E.C.R. I-2549, para. 57.
148. Case C-415/93, Bosman, 1995 E.C.R. I-4921.
149. Commission White Paper on Sport, COM (2007) 391 final (July 11,
2007), available at http://ec.europa.eu/sport/documents/wp_on_sport_en.pdf
[hereinafter White Paper].
2014]
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421
tor.”150 After highlighting several reasons why sport plays such
an important role in society,151 the White Paper discussed “the
specificity of sport,” emphasizing that the unique characteristics of sport make it subject to certain exemptions, such as organizational rules establishing separate competitions for men
and women.152 Then, using similar language to the Court’s prior decisions regarding sport, the White Paper affirmed MecaMedina’s rejection of pure sporting rules and said that “the assessment of whether a certain sporting rule is compatible with
EU competition law can only be made on a case-by-case basis.”153 This declaration by the Commission not only affirmed
the end of the pure sporting exception but also reflected the
legislature’s support for the use of sporting objectives as potential justifications for Treaty violations.154
Next, the Treaty of Lisbon’s entry into force in 2009 marked
“the first time that sport [was] subject to explicit reference
within the treaties establishing and governing the European
Union.”155 However, the “content of the new provisions [were]
drawn with conspicuous caution,”156 making their “influence on
sport in Europe both profound and trivial.”157 Article 165(1) of
the Treaty of Lisbon states that “[t]he Union shall contribute to
the promotion of European sporting issues, while taking account of the specific nature of sport, its structures based on
voluntary activity and its social and educational function.”158
The treaty’s cautious phrasing has two implications. The first
implication involves a limited grant of power to govern in the
field of sports law.159 The Treaty of Lisbon grants the EU three
150. Id. at 2.
151. Such reasons included “enhancing public health,” id. at 3, “education
and training,” id. at 5, “promoting volunteering and active citizenship,” id. at
6, “social inclusion, integration, and equal opportunities,” id. at 7, and “prevention of and fight against racism,” id. at 8.
152. Id. at 13.
153. Id. at 14.
154. Stephen Weatherill, EU Sports Law: The Effect of the Lisbon Treaty, in
EU LAW AFTER LISBON 403, 403 (Andrea Biondi & Piet Eeckhout eds., 2012)
[hereinafter Weatherill, The Effect of the Lisbon Treaty].
155. Id.
156. Id.
157. Id.
158. TFEU, supra note 83, art. 165. See also Weatherill, The Effect of the
Lisbon Treaty, supra note 154, at 416.
159. Weatherill, The Effect of the Lisbon Treaty, supra note 154, at 416.
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BROOK. J. INT’L L.
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levels of governing power to various fields of law, called competences.160 The strongest level is “exclusive competence,” which
gives the EU sole power to “legislate and adopt binding acts in
[a field].” 161 The second, “shared competence,” allows both
member states and the EU to legislate.162 The third, “support
competence,” only gives the EU the power “to support, coordinate or compliment the action of the Member States” and does
not grant any legislative power.163 Of these three competences,
Article 165 grants “only a supporting competence for the EU,
the weakest type of the three.”164 This shows the EU’s hesitancy to get too deeply involved with sport governance.
Next, and perhaps more importantly in relation to sports law,
the Treaty’s explicit reference to sport validated the idea that
the goals of sporting organizations are capable of justifying a
restriction on competition or of free movement under certain
circumstances. It also further confirmed the special nature of
sport, the Commission’s statements from the White Paper, and
the Court’s general approach to sporting cases.165
II. A CHALLENGE TO FINANCIAL FAIR PLAY UNDER THE
CURRENT STANDARD
UEFA began implementing the Financial Fair Play regulations at the beginning of the 2012–2013 season and has already
withheld prize money from twenty-three clubs as sanctions for
noncompliance with the regulations.166 As more clubs feel the
repercussions of such sanctions, the likelihood of a challenge
under EU law increases. The most likely challenges to FFP
would be either under Article 45, as a restriction on the free
movement of workers, or under Article 101, involving agreements that affect trade. Under the current standard, analysis
of a challenge is a four-step process. First, the Court must de160. Division of Competences Within the European Union, EUROPA (Mar. 23,
2010),
http://europa.eu/legislation_summaries/institutional_affairs/treaties/lisbon_tr
eaty/ai0020_en.htm.
161. Id.
162. Id.
163. Id.
164. Weatherill, The Effect of the Lisbon Treaty, supra note 154, at 414.
165. Weatherill, The Effect of the Lisbon Treaty, supra note 154, at 416.
166. UEFA Hands Out First Financial Fair Play Penalties, BBC SPORT
(Sept. 11, 2012), http://www.bbc.co.uk/sport/0/football/19557934.
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SPECIFICITY OF SPORT
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termine whether the regulations are an economic activity within the meaning of the Treaty. 167 Next, the Court determines
whether the regulations constitute a restriction according to
each provision in question.168 Third, the Court looks to the regulation’s aims and determines whether the aims are capable of
justifying the restriction.169 Finally, the Court asks whether the
regulations are sufficient to achieve those aims without going
beyond what is necessary to do so.170
A. Financial Fair Play as a Restriction on Free Movement and
Competition
Applying the current standard of proportionality to FFP, “the
practice of sport is subject to [EU] law only insofar as it constitutes an economic activity within the meaning . . . [of the]
Treaty.”171 It is clear from case law that “this applies to the activities of professional and semi-professional football players,
which are in the nature of gainful employment or remunerated
service.”172 Additionally, although UEFA is based in Switzerland, a non-member state, and is governed by Swiss Law, the
ECJ’s ruling in Bosman shows that “an entity whose practi[c]es
[infringe] on competition or free movement in the EU comes
under its jurisdiction and EU law is applicable.”173
Next, the free movement claim and the competition claim
must be considered separately to determine whether the practices in question are compatible with the Treaty. Article 45(1)
states that “[f]reedom of movement for workers shall be secured within the Union.”174 In the context of sport, challengers
have invoked two distinct sections of Article 45, Sections 2 and
3(b). 175 Section 2 prohibits restrictions on the freedom of
167. Case C-325/08, Olympique Lyonnais SASP v. Bernard, 2010 ECJ EURLex LEXIS 113, para. 27 (Mar. 16, 2010).
168. Id. para. 33.
169. Id. para. 21.
170. Id.
171. Id. para. 27.
172. Case C-13/76, Dona v. Mantero, 1976 E.C.R. 1333, para. 12.
173. Steven Stewart, The Development of Sports Law in the European Union, Its Globalisation, and the Competition Law Aspects of European Sports
Broadcasting Rights, 16 SPORTS LAW. J. 183, 189 (2009).
174. TFEU, supra note 83, art. 45(1).
175. Id. art. 45(2), (3)(b).
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BROOK. J. INT’L L.
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movement due to discrimination based on nationality 176 and
Section 3(b) prohibits general restrictions on the right to move
freely within the territory of member states.177 The former type
of restriction can be dismissed outright because the Financial
Fair Play regulations apply equally to all clubs, and therefore
do not discriminate on the basis of nationality, either directly
or indirectly.178 However, the latter restriction requires deeper
analysis.
The Bosman Court stated that all “provisions which preclude
or deter a national . . . from leaving his country . . . in order to
exercise his right to freedom of movement . . . constitute an obstacle to [the freedom of movement] . . . even if they apply
without regard to the nationality.”179 The next question then
becomes whether the Financial Fair Play regulations preclude
or deter players from moving freely throughout the Union. Parrish and Miettinen refer to the minimum threshold for deterrence as a “substantial hindrance.” Referring to the ECJ decision of Volker Graf v. Filzmoser Maschinenbau GmbH,180 they
state that regulations that present “too uncertain and indirect
a possibility . . . of hinder[ing] free movement . . . [do] not constitute a restriction.”181
The effects of Financial Fair Play on players’ ability to move
freely within the EU exemplify this type of tenuous causal relationship. Actual or threatened UEFA sanctions on a club for
noncompliance have multiple consequences. First, the club will
be less inclined to over-spend, resulting in lower transfer fees
and lower potential salaries for players. While this may decrease the number of clubs willing to spend large sums of money on a player, the player will still have several club options,
including the opportunity to play in another country. Next, if a
club’s UEFA license is revoked, this will make the club less at-
176. Id. art. 45(2); see, e.g., Dona, 1976 E.C.R. 1333; Case 36/74, Walrave v.
Ass’n Union Cycliste Internationale, 1974 E.C.R. 1405.
177. Id. art. 45(3)(b); see, e.g., Case C-325/08, Olympique Lyonnais SASP v.
Bernard, 2010 ECJ EUR-Lex LEXIS 113 (Mar. 16, 2010).
178. Lindholm, supra note 8, at 202.
179. Case C-415/93, Bosman, 1995 E.C.R. I-4921, para. 96; see also PARRISH
& MIETTINEN, supra note 15, at 59.
180. Case C-190/98, Volker Graf v. Filzmoser Maschinenbau GmbH, 2000
E.C.R. I-493.
181. PARRISH & MIETTINEN, supra note 15, at 59; see also Volker Graf, 2000
E.C.R. I-493, para. 25.
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SPECIFICITY OF SPORT
425
tractive to players who want to compete in UEFA competitions.
However, because of the structure of UEFA competitions, if one
club is not permitted to participate, another club will take its
place, maintaining the amount of clubs participating in the
competitions. Thus, since the FFP regulations would not affect
a player’s ability to join a club and participate in those competitions, it is unlikely that the ECJ would find that Financial
Fair Play substantially hinders a player’s right to free movement under Article 45 of the Treaty.
The next step is to determine whether Financial Fair Play
constitutes a restriction of competition under Article 101,
which states that “all agreements between undertakings, decisions by associations of undertakings and concerted practices
which may affect trade between Member States and which
have as their object or effect the prevention, restriction or distortion of competition within the internal market [are] incompatible with the internal market.”182 Therefore, in order to fall
within the scope of Article 101, UEFA must either be an “undertaking” or an “association of undertakings.”183 Though not
defined in the Treaty, the ECJ provided a sweeping definition
of the term in Höfner v. Macroton GmbH,184 where it ruled that
“every entity engaged in an economic activity regardless of the
legal status of the entity and the way in which it is financed”
constitutes an undertaking.185 Thus, “an organization carrying
out regulatory functions and economic functions will be subject
to competition law in so far as its economic functions are concerned.”186
Based on this broad definition, and the Commission’s White
Paper, the Court would find that the UEFA’s FFP regulations
constitute an agreement between undertakings or among an
association of undertakings. The White Paper “acknowledge[d]
the usefulness of . . . licensing systems for professional clubs,”
but expressly stated that “[s]uch systems must be compatible
with competition . . . provisions.”187 Further, the “White Paper
listed as undertakings individual athletes performing services,
182. TFEU, supra note 83, art. 101.
183. PARRISH & MIETTINEN, supra note 15, at 110.
184. Case C-41/90, Höfner v. Macrotron GmbH, 1991 E.C.R. I-1979. See also
Lindholm, supra note 8, at 198 (analyzing UEFA’s status as an undertaking).
185. Höfner, 1991 E.C.R. I-1979, para. 21.
186. PARRISH & MIETTINEN, supra note 15, at 111.
187. White Paper, supra note 148, at 17.
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BROOK. J. INT’L L.
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sports clubs carrying out economic activities such as selling
tickets, broadcasting or advertising rights, and national and
international sports associations that commercially exploit a
sports event as capable of constituting undertakings.”188 UEFA
and its FFP regulations meet both these standards. First,
UEFA’s FFP regulations fall squarely into this category of licensing systems to which the White Paper refers. 189 Second,
UEFA also commercially exploits football by coordinating ticket
sales, selling advertising, and distributing media rights.190
Additionally, case law shows that UEFA’s FFP regulations
constitute an agreement between undertakings or among an
association of undertakings. In Piau v. Commission,191 the ECJ
ruled on a challenge to FIFA’s rules governing players’
agents.192 To rule on the matter, the Court first had to determine whether FIFA and its regulations fell within the scope of
the Treaty.193 The ECJ stated that FIFA was made up of national associations, and because those associations constitute
“associations of undertakings . . . by virtue of the economic activities that they pursue,” FIFA also “constitutes an association
of undertakings within the meaning of [the Treaty].”194 Because
UEFA is made up of the same national associations that the
Court found determinative in Piau, UEFA is also an undertaking or association of undertakings within EU Law. 195
The next step in analyzing an Article 101 challenge is to determine whether the Financial Fair Play regulations “have an
effect on trade between Member States.” 196 Again, the ECJ
188. PARRISH & MIETTINEN, supra note 15, at 111.
189. See UEFA CLUB LICENSING REGULATIONS, supra note 4, art. 1.
190. UEFA Champions League Revenue Distribution, UEFA CHAMPIONS
LEAGUE
(Sept.
12,
2012),
http://www.uefa.com/uefachampionsleague/news/newsid=1858497.html [hereinafter UCL Revenue Distribution].
191. Case C-171/05P, Piau v. Comm’n, 2006 E.C.R. I-37.
192. Id. paras. 3–8. Upon Piau’s request, the Commission initiated a procedure to investigate FIFA’s rules. Id. para. 10. Subsequently, FIFA amended
several of the rules and the Commission discontinued its investigation, saying that the amendments eliminated the “main restrictive elements of the . . .
[r]egulations and that there was no longer any Community interest in continuing with the procedure.” Id. para. 19. Piau then brought an action to annul the Commission’s decision. Id. para. 29.
193. Id. paras. 3–8.
194. Id. para. 72.
195. About UEFA—Overview, supra note 3.
196. See PARRISH & MIETTINEN, supra note 15, at 113.
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provided a broad definition of what constitutes an effect on
trade for this purpose, requiring “only probable foresight of influence, direct or indirect, actual or potential, on the pattern of
trade between Member States which can be either detrimental
or beneficial.”197 Though this also brings agreements that facilitate competition within the article’s scope, the “effect[] . . .
must be ‘appreciable’ to fall within [EU]” law.198 The Commission provided guidance as to what is appreciable in its notice
entitled Guidelines on the Effect of Trade Concept Contained in
Arts. 81 and 82 of the Treaty199 and stated that “where the parties to an agreement . . . control less than 5% of the relevant
market and the turnover of the products in question is less
than €40 million[,] an agreement fails the appreciability test . .
. .”200
ECJ case law also dictates that the Court would find that
FFP regulations have an appreciable effect on trade. In Piau,
the ECJ looked to the agency fee regulations in question and,
citing phrases such as “for a fee” and “transfer contract,” concluded that the regulations constituted an economic activity
and therefore had an effect on trade.201 Similarly, UEFA’s FFP
regulations contain inherently economic language and their
effects are far more pervasive than the rules in Piau. For example, a club that qualified to participate in the “group
stage”202 of UEFA’s 2012–2013 Champion’s League received “a
minimum €8.6 million” in profit, 203 while the winner of the
197. Id. (quoting Case 56/65, Société Technique Minière (L.T.M.) v. Maschinenbau Ulm GmbH (M.B.U.), 1966 E.C.R. 337) (internal punctuation marks
omitted).
198. Id. at 114 (citing Case 5/69, Völk v. Vervaecke, 1996 E.C.R. 295).
199. At the time of the notice, competition law was governed by Articles 81
and 82 of the Treaty. Commission Notice—Guidelines on the Effect of Trade
Concept Contained in Articles 81 and 82 of the Treaty, para. 52, 2004 O.J. (C
101) 7.
200. PARRISH & MIETTINEN, supra note 15, at 114.
201. See Case C-171/05P, Piau v. Comm’n, 2006 E.C.R. I-37.
202. The group stage consists of thirty-two clubs. Those clubs are divided
into groups of four based on a seeding system. Each club then plays every
club in its group twice, once at home and once away, and is awarded three
points per win and one point per draw. The top two clubs from each group
advance into a knockout round. Competition Format, UEFA CHAMPIONS
LEAGUE,
http://www.uefa.com/uefachampionsleague/season=2013/competitionformat/in
dex.html (last visited May 20, 2013).
203. Champions League Revenue, supra note 27.
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tournament, FC Bayern Munich, earned over €55 million in
prize money. 204 Also included in the FFP’s compensation
scheme are performance-based bonuses,205 and a market pool
share that is split amongst the competing clubs.206 With such
large figures involved, a club that routinely competes in the
Champions League would suffer immense economic losses if its
license were revoked for non-compliance. It follows that if the
ECJ found that the Piau regulations of agency fees constituted
an effect on trade, it would make a similar finding in regards to
the compensation scheme of the FFP regulations.
With respect to the appreciability test, the Commission’s
guidance on trade effects suggests that UEFA and its FFP regulations would meet both the 5% relevant market threshold
and the minimum turnover requirement of €40 million. “Market definition is particularly important in the context of [EU
competition law],”207 and the Court can approach the problem
in various ways.208 The Piau case offers guidance as to how the
Court would define UEFA’s market, but ultimately this determination is made at the Court’s discretion.209 Although deciding the case on other grounds, the Piau Court stated that “the
market affected by the [player agency] rules in question is a
market for the provision of services where the buyers are players and clubs[,] and the sellers are the agents.”210 This notion
suggests a willingness to “entertain notions of FIFA’s activities
in the ‘football market,’” 211 which would be analogous to the
market affected by Financial Fair Play. Whether the Court intended to mean the world or the European football market is
immaterial because, in either case, UEFA’s market share
would surpass the 5% appreciability threshold.212 Further, with
UEFA’s top tournament boasting a €904.6 million prize pool,
the €40 million in turnover requirement is also met.
204. Id.
205. The bonuses consist of €1 million for a win and €500 thousand for a
draw in the group stage, increasing as the tournament progresses. Id.
206. Id.
207. PARRISH & MIETTINEN, supra note 15, at 114.
208. Id.
209. Id.
210. Case C-171/05P, Piau v. Comm’n, 2006 E.C.R. I-37, para. 112.
211. PARRISH & MIETTINEN, supra note 15, at 114.
212. Champions League Revenue, supra note 27.
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Finally, after meeting the two threshold requirements, in order to apply Article 101’s analytical framework, the FFP regulations must restrict competition in some way.213 The EU has
recognized two types of restrictions on competition: those that
have an object of negatively restricting competition, and those
that have the effect of negatively restricting competition. 214
However, incidental restriction from an agreement with a legitimate objective might not constitute a restriction of competition
if that restriction is unavoidable.215
Financial Fair Play is anomalous in this regard. While the
regulation’s goal is “to protect the long-term viability and sustainability of European club football,” 216 thereby preserving
competition conditions, the sanctions for non-compliance provided by the regulations constitute a restriction on the clubs’
ability to participate in the European market for club football.
The restrictive monetary or licensing sanctions are avoidable in
that there are alternative means available to achieve the
preservation of competition.217 Thus, if the monetary or licensing sanctions are avoidable, the restrictions on competition
caused by them are also avoidable, bringing the Financial Fair
Play regulations within the scope of Article 101, subject to the
principle of proportionality.
B. Proportionality
The principle of proportionality is recognized as a general
principle of EU law and is applied across almost all aspects of
EU governance.218 To be proportional, Financial Fair Play must
meet two requirements: (1) the regulations must have legitimate goals that are capable of justifying a restriction, and (2)
213. PARRISH & MIETTINEN, supra note 15, at 118. See also TFEU, supra
note 83, art. 101(1) (“all agreements between undertakings . . . which may
affect trade between Member States and which have as their object or effect
the prevention, restriction or distortion of competition within the internal
market”) (emphasis added).
214. PARRISH & MIETTINEN, supra note 15, at 119; Case 56/65, Société Technique Minière (L.T.M.) v. Maschinenbau Ulm GmbH (M.B.U.), 1966 E.C.R.
337, para. 3.
215. PARRISH & MIETTINEN, supra note 15, at 119.
216. UEFA CLUB LICENSING REGULATIONS, supra note 4, art. 2(2)(f).
217. See discussion supra Part II.B.
218. TRIDIMAS, supra note 17, at 136-39; see discussion supra Part I.B.
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the regulation’s means of achieving those goals must be necessary and not overly burdensome.219
1. A Test of Legitimacy
Even when an agreement falls within the scope of Article
101, it may nonetheless be exempt from the Article if it “contributes to improving the production or distribution of goods or
to promoting technical or economic progress, while allowing
consumers a fair share of the resulting benefit.”220 This is the
case when the “measure [is] appropriate and necessary to
achieve its objectives,” or proportional to the agreement’s legitimate goals.221 Within the context of competition, this framework uses the term “inherency” rather than the “justification”
terminology applied in the context of free movement challenges.222 This is because rules that contain inherent restrictions
are not actually considered restrictions under Article 101,
“whereas . . . justified rules under free movement are within
the meaning of ‘restriction’” and are considered excused by the
ECJ due to their legitimate goals.223 However, for the purposes
of analysis, “[t]he practical differences are limited, since the
analytical criteria applied to both are similar.”224 Further, although the language of Article 101 refers to goods, the ECJ has
interpreted it to include distribution of services.225 Therefore,
the next step in analyzing a challenge to Financial Fair Play is
to determine whether the regulations’ aims justify the restriction.
Although the ECJ often found sporting regulations incompatible with the Treaty, it typically found that the regulation’s
various goals had the potential to justify the restriction. First,
in Bosman, the Court found that “the aims of maintaining a
balance between clubs by preserving a certain degree of equality and uncertainty as to results” was a legitimate goal that
219. TRIDIMAS, supra note 17, at 139.
220. TFEU, supra note 83, art. 101(3).
221. TRIDIMAS, supra note 17, at 139.
222. PARRISH & MIETTINEN, supra note 15, at 122.
223. Id. at 122–23.
224. Id. at 123.
225. See Case 309/99, Wouters v. Algemene Raad van de Nederlandse Orde
van Advocaten, 2002 E.C.R. I-1577 (declaring that legal services are goods
within the meaning of the Treaty).
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could justify a restriction.226 This is also one of the main objectives of the Financial Fair Play regulations. By limiting the
amount of acceptable losses each year, the regulations aim to
level the playing field between the clubs that have investors
with seemingly endless amounts of capital and the clubs that
do not.
Additionally, in both Bosman and Bernard, the ECJ found
that “encouraging the recruitment and training of young players” was also a legitimate goal.227 Financial Fair Play encourages such development. Because the costs associated with
bringing young players through the club’s internal system are
significantly lower than bringing established players in
through transfers, a club struggling to meet Financial Fair
Play’s break-even requirement would likely invest more in recruitment. 228 Further, developing youth players can generate
more football-related income because as those players develop,
they can be sold to other clubs, which would raise money for
bringing new players or improvements to the club.229
Another justification, which has not been tested before the
ECJ, stems from the unique nature and structure of European
football. European football associations operate on a promotion
and relegation system, meaning that a club’s position in the
standings at the end of each season determines the level that
the club will play at in the next season.230 For example, in Eng-
226. Case C-415/93, Bosman, 1995 E.C.R. I-4921, para. 106.
227. Id.; Case C-325/08, Olympique Lyonnais SASP v. Bernard, 2010 ECJ
EUR-Lex LEXIS 113, paras. 7–10 (Mar. 16, 2010).
228. To illustrate, Christiano Ronaldo and Lionel Messi are arguably the
two best football players in the world. While Real Madrid FC, Ronaldo’s club,
paid a record £80 million to acquire him, Lionel Messi joined his club, FC
Barcelona, at age 13 without a transfer fee. Mark Ogden, Christiano Ronaldo
Transfer: Real Madrid Agree £80 Million Fee with Manchester United,
(Jun.
11,
2009),
TELEGRAPH
http://www.telegraph.co.uk/sport/football/teams/manchesterunited/5505073/Cristiano-Ronaldo-transfer-Real-Madrid-agree-80-millionfee-with-Manchester-United.html;
Lionel
Andrés
Messi—Biography,
http://www.fcbarcelona.com/football/firstFCBARCELONA,
team/staff/players/messi/biography (last visited May 20, 2013).
229. See, e.g., Rob Britton, Feeder Clubs or Future Investors? The Arsenal
(Sept.
9,
2012),
and
Porto
Way,
FOOTBALLSPEAK.COM
http://footballspeak.com/post/2012/09/09/The-Arsenal-and-Porto-way.aspx.
230. A. Nock, Promotion and Relegation Systems of Europe,
(Jul.
9,
2012),
FOOTBALLSPEAK.COM
432
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land’s Premier League (“PL”), the clubs who finish in the bottom three positions are relegated to the Championship, the
second tier league. 231 Meanwhile, the top two clubs of the
Championship are automatically promoted to the PL, while the
third through sixth place clubs compete in a playoff to win the
third promotion spot.232 To maintain such a system, a consensual interdependence must exist.233 Further, any disturbance to
this interdependence, like a club’s bankruptcy, will have effects
that ripple throughout each level of the sport. If a club that was
about to be relegated collapsed financially, either a club that
would otherwise not have been relegated would be, or a club
that would otherwise have been promoted would not be. In either case, that club would suffer financial hardship from either
the loss of income from going down to a lower league, or the
loss of income that it would have expected from moving up to a
higher one. By requiring clubs to maintain fiscal responsibility,
Financial Fair Play seeks to achieve stability and avoid such
disturbances in football’s internal market. With such justifications, the ECJ would likely find that Financial Fair Play’s effects on competition could be justified if proportional to these
legitimate goals.
2. A Test of Necessity
Having met the first burden of proportionality, a legitimate
objective, the next step in the analysis is to determine whether
the Financial Fair Play regulations are necessary to achieve
that goal and not overly burdensome. It is at this stage of the
analysis that the ECJ has often found that a rule or regulation
is incompatible with the Treaty. The most notable example of
this is in Bosman, where the ECJ found that because the objectives of maintaining a competitive balance among the clubs and
encouraging youth development could “be achieved at least as
efficiently by other means,” the rules in question were not proportional.234 Similarly, it is likely that the ECJ would find Financial Fair Play regulations would not meet this test due to
http://footballspeak.com/post/2012/07/09/Promotion-and-RelegationSystems.aspx.
231. Id.
232. Id.
233. PARRISH & MIETTINEN, supra note 15, at 2.
234. Case C-415/93, Bosman, 1995 E.C.R. I-4921, para. 110.
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the alternative means available for FFP to accomplish its fiscal
responsibility goals. One example of an alternative means for
FFP to achieve its goals is to incentivize fiscally responsible
club management, rather than punish irresponsibility. In such
a scheme, a reward could be given to those clubs that achieve
an adequate financial balance, rather than sanctions for those
that do not. This scheme could also help clubs that are struggling competitively because a team that has a good financial
balance would likely spend the reward by purchasing players
from other clubs, thus putting more “responsible” money into
the football market. Another alternative could involve UEFA
representatives acting as advisors to clubs that wish to comply.
Instead of attempting to break even on its own, a club could
assent to having a UEFA financial advisor on staff that would
approve or deny decisions of the club based on its budget. By
making participation voluntary, such a system would be less
restrictive and would likely achieve the regulation’s aims just
as effectively. Because a variety of less restrictive means are
readily conceivable, Financial Fair Play would likely fail the
test of necessity.
The Court in Bosman invalidated the second set of rules in
question because they were “not sufficient to achieve [the] aim”
of maintaining a competitive balance. 235 The Financial Fair
Play regulations are unlikely to meet this high standard. While
the regulations will encourage many clubs to spend wisely,
their reach is limited. First, the majority of clubs are unlikely
to participate in UEFA cups due to the tournaments’ elite nature. For example, for an English club to participate in either
the Europa League or the Champions League, it must either
win one of England’s domestic tournaments, or finish in one of
the top five or six positions in the Premier League, depending
on a variety of factors.236 Although it is not impossible for a
lower division club to win one of these tournaments, it is ra-
235. Bosman, 1995 E.C.R. I-4921, para. 135.
236. When a club has qualified for the Champions League, the most prestigious of the UEFA tournaments, it cannot also qualify for the Europa League.
Therefore, the range of Europa League qualification can range from fifth
place to seventh place, but three English clubs will qualify. Frequently Asked
Questions, BARCLAYS PREMIER LEAGUE, http://www.premierleague.com/engb/fans/faqs/who-qualifies-to-play-in-europe/ (last visited May 20, 2013).
434
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re.237 Therefore, most of the clubs in the third or fourth tiers of
English football would not suffer from having their licenses revoked by UEFA, unless the English Football Association enforces the revocation too. Because lower division clubs face the
same problems of overspending, and are less likely to have a
wealthy investor, the Court would likely find that FFP is not
sufficient to achieve its goals.
Another decision where the ECJ invalidated a regulation on
proportionality grounds was Lehtonen, where it found that the
rules “went beyond what [was] necessary to achieve the aim
pursued.”238 Although a similar reason to that in Bosman, this
language suggests that the means used could pass the Court’s
test if appropriately scaled back. Applied to Financial Fair
Play, the ECJ would likely find that the extensive penalties for
non-compliance go beyond what is necessary to achieve UEFA’s
goals. For example, the regulations could achieve these means
without revocation of a club’s license and keep the incentives
for compliance by merely withholding a portion of a club’s prize
money.
Therefore, although UEFA’s goals of ensuring stability of the
sport, promoting fair competition, and promoting youth development through Financial Fair Play are legitimate, the aforementioned factors, combined with the ECJ’s history of finding
sporting rules incompatible with the Treaty, make it highly unlikely that FFP would pass the test of proportionality.
III. A PROPOSAL FOR A NEW APPROACH TO SPORTS-RELATED
PROPORTIONALITY
If the Court were to apply a less exacting standard of proportionality in certain areas of law that do not require such strong
protection, it would allow for the Financial Regulations to
stand without diluting its doctrinal protection of more fundamental rights. Both the ECJ and the European Commission
have suggested that sports organizations should be granted
“conditional autonomy” due to sport’s unique needs and struc237. In the past thirty years, only one winner has been from a league other
than the Premier League. FA Cup Information, FA-CARLING.COM,
http://www.fa-carling.com/fa-cup/information/ (last visited Sept. 18, 2013); see
also
Cup
Final
Statistics,
THEFA.COM,
http://www.thefa.com/Competitions/FACompetitions/TheFACup/History/cupfi
nalresults (last visited May 20, 2013).
238. Case C-176/96, Lehtonen, 2000 E.C.R. I-2681, para. 58.
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ture.239 Such autonomy should be conditioned upon “respect for
the core norms of the Treaty,”240 such as fundamental human
rights and a free market. While there is no doubt that sporting
rules and regulations should not restrict an individual’s right
to free movement and other fundamental rights, there is a
strong argument “that the paradigm of open and unrestrained
competition simply does not apply to competitive sport, because
of the interdependence of sporting clubs and the pronounced
detrimental effects of market exit.”241 Therefore, with regard to
sport governance, the ECJ should distinguish between restrictions that violate fundamental or core human rights and
restrictions that violate EU competition law based on market
efficiency. Once distinguished, the Court should continue to
apply its exacting standard of proportionality to any regulation
or rule that restricts fundamental rights, but should apply a
lower standard to those that do not. This approach will serve to
give deference to the organizations that are most familiar with
the unique nature of sport.
A. Determining What Type of Right Is Involved
Determining whether a right is fundamental is not always
simple and should be evaluated on a case-by-case basis. Additionally, challenges to sporting rules often come under multiple
articles of the Treaty, so the Court must evaluate each claim
individually to determine what rights are involved. However,
because the ECJ’s normal practice is to evaluate each article
claim individually in order to determine whether the rule falls
within the scope of Treaty, 242 isolating the individual rights
does not impose an excessive burden on the Court.
The development of what constitutes a fundamental right
stems largely from ECJ case law. The seminal case in this development was Internationale Handelsgesellschaft v. Einfuhr-
239. “The story of the manner in which first the Court and more recently
the Commission developed the law in its application to sport is a complex
though intriguing one. It reflects the need to allow a conditional autonomy to
sporting practices.” Weatherill, The Effect of the Lisbon Treaty, supra note
154, at 405.
240. Id.
241. PARRISH & MIETTINEN, supra note 15, at 104.
242. See, e.g., Bosman, 1995 E.C.R. I-4921.
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und Vorratsstelle Getreide. 243 In Handelsgesellschaft, German
citizens contended that EU regulations were incompatible with
certain fundamental rights embodied in the German Constitution.244 The ECJ found that although its actions need not conform to the German Constitution, “respect for fundamental
rights forms an integral part of the general principles of law
protected by the Court.”245 Since this decision, the ECJ has recognized a wide variety of fundamental rights through case law.
Further, “there are now express references to their protection
in the [Treaty] and the [EU] has acquired its own catalogue of
fundamental rights in the form of the Charter [of Fundamental
Rights of the European Union].” 246 While not an exhaustive
list, the Charter of Fundamental Rights of the European Union
(“Charter”) 247 is divided into six sections: dignity, freedoms,
equality, solidarity, citizens’ rights, and justice.248 The enumerated rights range from the right to marry249 to the right of collective bargaining,250 and the rights to free movement of persons and services are highlighted in the preamble.251 Ultimately, however, when a right is not expressly mentioned in the
Charter, it is in the Court’s discretion whether to treat it as a
fundamental right.
Under the proposed system, after a determination that a
right is fundamental, the ECJ’s proportionality analysis would
remain the same. For example, if the Court determined that a
regulation created a restriction on an individual’s right to marry, it would first look to the aims of the rule to see if the restriction could be justified. Then, the Court would test the regulation’s necessity by asking whether there is a less restrictive,
alternative means to achieving those aims; whether the regulations are sufficient to achieve those aims; and whether the reg243. Case 11/70, Internationale Handelsgesellschaft mbH v. Einfuhr- und
Vorratsstelle für Getreide und Futtermittel, 1970 E.C.R. 1125; TRIDIMAS,
supra note 17, at 301.
244. Internationale Handelsgesellschaft mbH, 1970 E.C.R. 1125.
245. Id. para. 4.
246. TRIDIMAS, supra note 17, at 298.
247. The Charter of Fundamental Rights of the European Union, EUROPEAN
PARLIAMENT, http://www.europarl.europa.eu/charter/default_en.htm (last updated Feb. 21, 2001) [hereinafter EU Charter of Fundamental Rights].
248. Id.
249. Id.
250. Id. art. 28.
251. Id. pmbl.
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ulations go beyond what is necessary to achieve them. By continuing to apply this “fundamental proportionality” standard,
the ECJ would be able to preserve the respect for fundamental
rights that it advocated in Handelsgesellschaft.
1. Non-fundamental Rights
The ECJ has not found that every right presented in a challenge under EU law deserves the same amount of protection.
For example, in J. Nold, Kohlen- und Baustoffgroßhandlung v.
Commission of the European Communities,252 the Court distinguished the right of a wholesaler to conduct its business from
the right to make a profit and said that the guarantees afforded to fundamental rights “can in no respect be extended to protect mere commercial interests or opportunities.”253 In a similar
case, Liselotte Hauer v. Land Rheinland-Pfalz,254 the applicant
argued that regulations allowing the German government to
deny her a vineyard permit 255 infringed on her fundamental
rights to property256 and freedom to pursue trade.257 The Court
rejected the applicant’s argument and declined to extend fundamental protection to a type of restriction that is commonly
“known and accepted as lawful . . . in [the] constitutional structure of all the Member States.”258
Under the proposed system, if the Court finds that a regulation infringes on a non-fundamental right or rule, instead of
using the standard applied to fundamental rights, it would apply a “non-fundamental proportionality” standard that gives
greater deference to the regulating organization. Using the
Hauer case as an example, the Court would first ask whether
the regulations in question are aimed at a legitimate goal. In
regulating the vineyards in Germany, the government could
have the goals of soil preservation, protecting public health by
limiting wine consumption, or stabilizing the wine market, all
of which would likely be legitimate. The next step would be the
252. Case 4-73, J. Nold, Kohlen- und Baustoffgroßhandlung v. Comm’n,
1974 E.C.R. 491.
253. Id. para. 14.
254. Case 44/79, Liselotte Hauer v. Land Rheinland-Pfalz, 1979 E.C.R.
3727.
255. Id. para. 2.
256. Id. para. 4.
257. Id. para. 31.
258. Id. para. 22.
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same test of necessity, but instead of the least restrictive
means, sufficiency, and beyond necessity tests, the Court would
simply ask whether the means chosen could be rationally expected to advance the intended goals. The Court would likely
find that the Hauer permit system for vineyards would meet
this standard and would therefore uphold the regulation. This
system would give the ECJ the option to defer to regulating
bodies that may have more adequate knowledge and insight
into the best means of achieving a goal. It would also alleviate
the problem of the ECJ having to consider every potential less
restrictive means, whether realistic or not, to determine
whether a rule is proportional. Finally, it would allow the ECJ
to avoid diluting the fundamental rights doctrine when it does
not consider that the rights involved warrant strict protection.
B. Financial Fair Play and the New Standard
Analysis of Financial Fair Play under the new standard
would likely achieve a different result than under the Court’s
current standard. The first step, determining whether a restriction or violation of the Treaty exists, would remain the
same. The next step in the new system would be to determine
what right or rule is being violated. Then, the Court would determine whether each right or rule involved is either a fundamental or non-fundamental right. Finally, the Court would apply the corresponding standard of proportionality to determine
whether the rule is compatible with EU law. Because of Financial Fair Play’s legitimate goals and reasonable means of advancing them, the Court would likely find the regulations acceptable.
As discussed above, 259 a claim against Financial Fair Play
would likely come under Articles 45 and 101. However, because
of the tenuous causal relationship between Financial Fair Play
and a football player’s ability to move from country to country
freely, the Court would likely not go any further in its analysis
of the Article 45 claim of discrimination based on nationality.260
That leaves only the Article 101 claim and the determination of
whether the right to free competition would be considered a
fundamental or non-fundamental right.
259. See discussion supra Part II.A.
260. See discussion supra Part II.A.
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The likely starting point of the Court’s analysis would be Article 16 of the Charter, which touches on the right to conduct a
business.261 However, the article merely states that “[t]he freedom to conduct a business in accordance with Community law
and national laws and practices is recognised.”262 Although Article 16 involves the freedom to conduct a business, it does not
address any aspect of competition. Additionally, the Court
would likely find that the phrase “in accordance with Community law and national laws” does not necessitate conducting a
business with fiscal responsibility as required by FFP.263
Unlikely to find the Charter determinative, the Court would
then look to case law as an indicator of whether unrestrained
competition is fundamental. Here, the Nold case is particularly
telling. The applicant in Nold, a wholesaler in the coal and construction materials industries, challenged a regulation that set
the minimum amount of coal a purchaser must buy per year to
remain a wholesaler.264 The applicant contended that by setting the minimum at a “quantity which greatly exceed[ed] [the
business’s] annual sales in [the] sector,”265 the regulation deprived the applicant of its “right [to] freely . . . choose and practice [its] trade or profession.”266 The Court rejected this argument, finding that such regulations “must be viewed in the
light of [their] social function.”267 The Court went on to say that
the applicant’s inability to compete in the market due to the
regulations represented a “mere commercial interest” that does
not warrant fundamental protection.268
The effects of the regulations in Nold are similar to the effects of Financial Fair Play. First, the regulation is industry
specific and affects undertakings differently depending on their
size and profitability. Those affected in Nold were smaller organizations, which were unable to generate enough sales to
match the minimum purchase quota. 269 The Financial Fair
261. See EU Charter of Fundamental Rights, supra note 247.
262. Id. art. 16
263. Id.
264. Case 4-73, J. Nold, Kohlen- und Baustoffgroßhandlung v. Comm’n,
1974 E.C.R. 491, para. 1.
265. Id.
266. Id. para. 14.
267. Id.
268. Id.
269. See id. para. 1.
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Play Regulations are likely to affect clubs that are less popular
and less able to generate football-related income, whether it is
through merchandise sales, television rights, or player sales.
Second, the effect of the regulation for the Nold applicant was a
total ban on the undertaking’s access to the wholesale coal
market. 270 The effect of the FFP regulations on a noncomplying club is less excessive because it would not ban all
access to the football market. Instead the sanction would merely ban access into the UEFA sanctioned competitions, or European football market, allowing the club to continue to participate in competitions domestically. Therefore, the restraint on
the free market from FFP regulations would be less pronounced than those in Nold. Third, viewed in light of their social function, as instructed by the Nold Court, the FFP regulations serve multiple purposes such as maintaining a competitive balance, encouraging youth development, and promoting
market stabilization. Finally, because a club can still compete
in other competitions to generate ticket revenue, develop and
sell players to make a profit, and sell merchandise and media
rights, the benefits of competing in the UEFA competitions
represent no more than “a mere commercial interest”—similar
to the interest seen in Nold. Therefore, taking the totality of
these factors and the similarity of the effects to Nold, it is unlikely that the ECJ would find that the Financial Fair Play
regulations restrict any fundamental rights that warrant such
stringent protection.
The final step in the analysis is to determine whether the Financial Fair Play regulations can rationally be expected to advance the goals of maintaining a competitive balance, encourage youth development, and promote market stabilization. The
Court would likely find that the regulation’s sanctions could
rationally advance each of these goals. Because Financial Fair
Play would limit clubs from spending from their owners’ personal finances, the regulations would advance the goal of narrowing the gap between clubs with wealthy benefactors and
those operating on a modest budget. Next, the regulations will
cause clubs to seek alternative means of finding players and
sources of football-related income. Because bringing a player
through a club’s youth system is a means of achieving both of
these objectives, it is reasonable to find that Financial Fair
270. Id.
2014]
SPECIFICITY OF SPORT
441
Play would advance this goal. Finally, a market exit by a bankrupt or financially unstable club would cause a severe disturbance to the football market. By encouraging fiscal awareness
and responsibility, the regulations would likely lead to fewer
bankruptcies and therefore promote stability.
CONCLUSION
The ECJ’s hesitation to grant sporting organizations extensive powers of self-governance is well founded due to the potential of abuse that comes with such autonomy. However, because
of its distinct characteristics, the sports market does not appropriately fit within the EU’s current legal framework. While
sports governance will never fit perfectly into the framework of
EU law, the proposed “non-fundamental proportionality”
standard would allow the Court to defer to organizations’ inside knowledge of the sports market. It would do so by granting
the associations the necessary, but conditional, autonomy that
they need to efficiently regulate, without diluting principles
developed to preserve the respect for fundamental rights in the
EU.
Kevin Kehrli

B.S., Fordham University, College of Business Administration (2009); J.D.,
Brooklyn Law School (expected 2014); Executive Notes & Comments Editor of
the Brooklyn Journal of International Law (2013–2014). I am grateful to the
staff and editors of the Journal for their hard work and guidance throughout
the writing process. I would also like to thank my family and friends for their
love, support, and encouragement in all my endeavors. All errors and omissions are my own.